Highlight on Kentucky: Bevin’s proposed Medicaid waiver hits snags

Kentucky Governor Matt Bevin’s (R) administration will be making some changes to its Section 1115 waiver, known as the Kentucky Helping to Engage and Achieve Long Term Health (HEALTH) demonstration project. The proposal, which was published in June, saw pushback from the federal government and health advocacy organizations for Bevin’s plan to undo Medicaid expansion under the Affordable Care Act and for some of the HEALTH project’s provisions that would add work or volunteer requirements for some Medicaid recipients.

Kentucky HEALTH proposal

If CMS approves the Section 1115 waiver for Kentucky HEALTH, the state’s Medicaid program would include a work requirement and the payment of premiums. The state sees Kentucky HEALTH as temporary coverage for able-bodied adults without health coverage through an employer. It would require such beneficiaries participate in “community engagement” activities, which include employment or job training, job searching, and volunteer work, for five hours per week after three months of program participation. This requirement ramps up to 20 hours per week after 12 months. All beneficiaries, excluding pregnant women and children, would be subject to a flat monthly premium, established on a sliding scale based on the individual’s income level. For more on the proposal, see Kentucky Medicaid proposal includes community engagement, employer program, premium requirements, Health Reform WK-EDGE, June 29, 2016.

Criticism of plan

The Kentucky HEALTH plan has faced criticism from multiple sources. In June, HHS Secretary Sylvia Burwell responded to an open letter from Bevin’s predecessor, former governor Steve Beshear (D), saying that CMS evaluates Section 1115 waiver proposals based on access to coverage and affordability of care. Burwell wrote, “states may not impose premiums or cost sharing that prevent low-income individuals from accessing coverage and care, nor may they limit access to coverage or benefits based on work or other activities.” She explained that the waiver proposal had not yet been submitted, but that the agency was committed to working with Kentucky to reach a solution.

The Kentucky Equal Justice Center submitted extensive comments on the HEALTH plan, calling the proposals in the plan “at least a step removed” from the state’s goals with the plan, and wrote, “We suggest that the framers of the waiver consider a different premise: health coverage and care are work supports rather than work substitutes.” The Center also pointed out the logistical challenges of the community service requirements in the proposal, by doing some quick mathematical calculations. In its hypothetical, the Center laid out a scenario where 100,000 Kentuckians statewide are covered for a year and have a 20-hour work requirement–creating 2,000,000 hours of work activity in a single week to arrange, track, and enforce. Even on a much smaller scale, such as 10,000 individuals with the 20-hour requirement, the state would need to find 10,000 nonprofits to take one volunteer each, or 1,000 nonprofits to take 10 volunteers.

The Kentucky Nonprofit Network raised similar concerns in its comments, writing that “supervising, training and managing volunteers requires nonprofit resources of staff, time, funding and expertise.” The Network shared a sampling of comments received from its member organizations regarding the costs and burdens that would be put on nonprofits as a result of the proposed requirement.

State response

Originally, Kentucky planned to accept comments through July 22, 2016. It later extended the comment period through August 14, giving the public an additional three weeks to submit its views on the proposal. Soon after the extended comment period ended, state Cabinet for Health and Family Services Secretary Vickie Yates Brown Glisson told the Kentucky legislature’s Medicaid Oversight and Advisory Committee that, based on the comments received, the Bevin Administration would be making changes to the HEALTH proposal, but that it was too early to detail what those changes would be.

Based on Burwell’s statement in her letter to Beshear that most Section 1115 waivers take six to 12 months to implement after submission to CMS, it is unlikely that Kentucky’s Medicaid expansion coverage will be changing in January 2017.